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Tag: FIRS

  • Committee seeks Customs, FIRS merger

    Committee seeks Customs, FIRS merger

    The National Tax Policy Review Committee has advised the Federal Government to merge the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS) to improve revenue generation and accountability.

    The draft of the policy was presented at the Committee’s second stakeholders engagement yesterday in Abuja by Mr Taiwo Oyedele, who is the West Africa Tax Leader at PricewaterhouseCoopers.

    Oyedele said the committee agreed that the current system promoted multitaxation, tax evasion and wastage, saying ”part of our recommendation will be that FIRS and Customs should be merged; but not just them, but all revenue generating agencies at the federal level should be merged into one.”

    He said what exists now is not effective, because it duplicates the collection mechanism. “All the structures you have in FIRS is replicated in Customs, so cost of collection goes up. It also makes it easier for tax evaders to manipulate the system. You can provide information for customs and FIRS is not aware of it,” Oyedele said.

    According to him,having one revenue agency “will flag all the information about a tax payer when he or she is paying tax. It will also ensure that leakages in the system are reduced. This is why we are recommending merger as part of the policy.”

    The committee also recommended the introduction of Tax Amnesty Programme. He said some companies or individuals might be afraid to join the tax net for fear of being asked to pay past tax liabilities. A tax amnesty, he said “would assure the public that past offences would be forgiven, thus enable government to expand the tax net.”

    Other key recommendations of the draft policy include establishment of Taxation Committee at national, and state assemblies, administrative framework for amnesty and whistle blowing.

    These, the committee said, were necessary to move Nigeria from its current position of 181 out of 189 countries to top 50 on the Ease of Paying Taxes World Report.

    The Chairman of the Committee, Prof. Abiola Sanni, said the need to improve revenue generation in the economy influenced the decisions of the committee.

    The National Tax Policy was first published in 2012 by the then Minister of Finance, Dr Ngozi Okonjo-Iweala, to entrench a robust and efficient tax system in Nigeria. The committee was, however, set up by the Minister of Finance, Mrs Kemi Adeosun on August 10 this year to review the existing policy.

  • FIRS targets N5.2b from 10 million new taxpayers, says Fowler

    FIRS targets N5.2b from 10 million new taxpayers, says Fowler

    Nigeria plans to raise N5.2 billion from taxes next year, Federal Inland Revenue Service (FIRS) Executive Chairman Babatunde Fowler, said yesterday.

    He also said the agency has a target of 10 million new taxpayers to bring the number to 20 million people.

    About 700,000 firms that have never paid taxes are to be brought into the tax net as the country seeks new revenue sources to offset low oil prices that have pushed the economy into its first recession.

    Fowler, in an interview with Reuters news agency, said: “We collected a little over N2.3 trillion, so far – from January to 31 August.  It is almost at par with last year but take into consideration that the economy is going through a little slowdown.”

    He said that the revenue from Value Added Tax (VAT) has increased by 25 per cent year-on-year and corporate income tax held steady over the same period but petroleum profit tax was expected to have halved, mainly due to low oil prices.

    Fowler, Lagos’ former tax chief, who increased monthly tax revenues by 70 per cent within four years in the nation’s commercial capital, said a new unit created early in the year has deployed inspectors, armed with laptops to update databases, registering businesses and individuals, who are then tracked to check whether they have paid taxes.

    “From our estimates, we expect that we have 60 million individuals who should pay some form or level of tax,” said Fowler.

    He said tougher enforcement would be combined with a planned waiver on interest and penalties covering the period from 2012 to 2015 under which people and businesses would only be asked to pay the principal amount of tax liabilities due.

    “We will give them a 45-day window to come forward and register and that will make them eligible for that waiver,” said Fowler of the proposal, which was submitted to the finance minister for approval.

    He said: “A lot of people who are not in the tax net are a bit jittery or afraid to come and register, thinking that we might go back two or three years and the amounts might be considerable.”

    But he warned that those who failed to register for the scheme – which he said could be rolled out as soon as October 3 – would face stiff penalties.

    Individuals and businesses who did not come forward voluntarily would be asked to pay back taxes plus interest and penalties, he said.

    “We will also consider criminal prosecution of chief executive officers or board members,” Fowler said.

    He was cautious on the idea of an increase in the VAT rate which, at 5 per cent, is among the lowest in the world.

    The government, struggling to fund a record N6.06 trillion (about $18.6  billion) 2016 Budget that aims to stimulate growth by tripling capital expenditure, set FIRS a target of raising N4.95 trillion in taxes, up from N3.73 trillion last year.

    International Monetary Fund (IMF) Managing Director  Ms. Christine Lagarde suggested a VAT rate hike when she visited the country in January and Vice President Yemi Osinbajo later said the government was considering tax regime changes to raise funds.

    Fowler said it was part of the government’s remit to “take a decision” on VAT but he thought “the economy is not ready for a VAT increase right now”.

    “The level of compliance was too low so that if we increased the rate of VAT it would be a punishment and unfair on those who are collecting and remitting VAT,” the tax chief said.

  • Tax on premium depleting our profits, say operators

    Tax on premium depleting our profits, say operators

    Insurers have criticised the Federal Inland Revenue Service (FIRS) levy on premium, saying it is affecting their earnings.

    Prestige Assurance Plc Chairman Hassan Usman told shareholders in Lagos that the company’s 2015 result had been affected by the levy.

    He said the FIRS should have levied profits, instead of  premiums.

    Citing Prestige, Hassan said the firm’s earnings before tax was N20.3 million while loss after tax stood at N145.3 million in its 2015 financial  year.

    The huge gap, according to him, was caused by tax.

    Staco Insurance Plc, immediate past chairman,Dere Otubu, said the company made a profit before tax of N168.6 million, but that it went down to N84 million after it was taxed.

    For Consolidated Hallmark Insurance Plc, the profit before tax stood at N704.9 million, its Managing Director, Eddie Efekoha said, noting  that the profit after tax was reduced to N545.8 million.

    Meanwhile, the umbrella body of insurance companies in the country, the Nigeria Insurers Association (NIA), said the issue of multiple tax had lingered for too long.

    Its Director-General, Sunday Thomas, said the oversight function of the government agent was impacting on the business of member-companies.

    He said: “The leadership of the association met with the executive chairman and management of the FIRS in furtherance of its efforts at resolving the lingering tax issue.

    “The association has intervened even as it maintained cordial relationship with the FIRS. At the end of the meeting, the association received strong assurance from the FIRS team that the issues raised by the NIA delegation would be addressed.”

  • My ordeal at FIRS

    Just recently, I was at the Federal Inland Revenue Service (FIRS) office on Adeniyi Jones Street, Ikeja to get a Tax Identification Number (TIN). Being a relatively new company, getting a TIN was a prerequisite for running a corporate account and charging clients for value-added tax (VAT).

    I had spoken to my account officer in one of the banks before that very day and she told me someone could help me get the TIN in a space of 24 hours if I agreed to part with N5,000. She had warned that if I refused to toe that path, the FIRS people will do their best to frustrate my efforts. The FIRS staff I spoke to also confirmed the same thing. He emphasised that getting a TIN is free but then, I should ‘appreciate’ the tax officer so the person will give some urgency to my application and also let me know when the TIN is out.

    I took everything else mentioned as a requirement but failed to take the bribe money along. As I entered the Tax Office downstairs, I walked up to the lady sitting at the second table to the left. After I told her what I had come for, she grudgingly handed me two forms to fill and started calling out a list of things I needed to provide. She kept on calling out some more things until she mentioned a utility bill and I told her I did not have it. She was full of joy and told me with so much derision in her voice that I should complete all the requirements first before I even start dreaming of getting a TIN. My earlier question to her about the possibility of getting the TIN that very day met a cold and robotic response: “Not possible!”

    I found my way to the nearest IKEDC office and topped up my electricity meter card, then took the receipt back to the FIRS office. This time around, I decided to go meet the lady at the very first table to the left. I just assumed that she might be different. This time around, I was armed with my utility bill. I had my company seal and letterhead with me too so I quickly scribbled an instruction and affixed my seal on it. She suddenly told me that handwritten instructions are not allowed. They must be typed. When I asked her why, she said she did not know. The only thing she knew was that that was what they were told. Bemused, I went to a close-by computer centre and typed the instruction, then returned to the same lady with everything she needed, this time, making sure she could not hold on to anything else.

    In the end, she collected all my documents, stamped my form and told me to return the following week. I told her that I was reliably informed I could get the TIN in 24 hours. In response, she ignored me for some seconds, then exclaimed: “I don’t know about that one o”. I smiled, thanked her and left.

    Beyond complaining about what the people in government are doing, we should focus more on what the different individuals saddled with different tasks and responsibilities are doing. Are we not perpetuating the system by either being a part of it or encouraging it? Instead of walking into the FIRS office on Adeniyi Jones and bribing those greedy staff to do their job, why can’t we all choose to do the right thing and report them when they are trying to frustrate us? Why can’t we employ some patience in our attempt to force the system back to normalcy? There is no doubt that this will take a long time, but should we now choose to abandon changing the narrative just because we believe it is a Nigerian thing?

    FIRS is a metaphor for folly; a metaphor for all the things that should not be. It is a metaphor for Nigeria.

     

    • Onyeka Dike,

    Lagos.

  • N5,000 tax enough to save a child from malaria, says FIRS chief Fowler

    N5,000 tax enough to save a child from malaria, says FIRS chief Fowler

    A tax of N5, 000 is enough to save the life of a child who has malaria from death, Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, has said.

    Fowler recalled how the establishment of a connect between tax contribution of as little as N5, 000 and the life of a child, who may die from malaria, touched the hearts of some taxpayers who became compliant taxpayers in Lagos, when he held the forte as the chairman of the Lagos Internal Revenue Service (LIRS).

    In a statement, FIRS spokesman Wahab Gbadamosi said the FIRS chief made his observation in Accra at the Annual Tax Conference of the Chartered Institute of Taxation, Ghana (CITG), where Fowler was also given an award as a Honourary Fellow of the institute.

    Fowler noted that every kobo contributed by a taxpayer – even as little as N5, 000 – is enough to stop the death of a child from malaria.

    He told tax practitioners and administrators, from Ghana, Sierra Leone, Nigeria, Cote D’ivoire and other parts of the West African sub-region that beyond deploying the law, enforcement, technology and mobilisation, tax administrators must deploy a medley of psychology, persuasion and being firm to convince citizens to pay tax and to fund their country’s development.

    The statement quoted Fowler as saying: “When you ask people to pay tax, they ask you: ‘Why?’ But when you tell them that a tax of N5, 000 is enough to safe a child from dying from malaria, their attitude about tax begin to change gradually. As a tax administrator, you have to become a teacher to save the life of a child.

    “The point is that as tax administrators, we must see the work that we do, not just as another job, but as nation building. Tax collection is nation building. It is serving your nation. It is serving God.

    “When you convince a taxpayer that the tax he/she pays could save the life of a child who has malaria from death, you could begin to touch the taxpayer’s heart.

    “Before the law changes, tax administrators, need to wear the hat of a teacher, a psychologist, a friendly person and a firm upholder of the law.

    “All stakeholders must be conscious of our roles in ensuring that Africa catches up with the rest of the world in moving away from dependence on resource revenue towards dependence on taxation as the primary source of funding for our development.”

    The FIRS chief was said to have expressed concern that no member of the Organisation of Petroleum Exporting Countries, OPEC – with all their wealth – belongs to the league of developed countries.

    “Today”, he noted, “Venezuellans queue for food. It can be argued that the extent to which an economy is able to grow sustainably and develops depends to a large extent on its ability to generate tax revenue to finance its expenditure and the efficiency if its tax system.

    “Even in Nigeria, oil, gas and mining sector (6.48) is not the biggest contributor to the Gross Domestic Product (GDP) of $422.59 billion dollars. The sector takes the third place after Trade (19.15) and Agriculture (19.0).”

    Fowler, who stated that governments fund budget either by levying taxes or borrowing, noted that whatever tax collectors do must still be within the ambit of the law.

    He observed that “though tasking, it is still possible to collect taxes with existing laws”, describing  obsolete laws and challenging law amendment processes as some of the challenges to tax legislation in Africa.

     

     

  • FIRS shuts Akume’s hotel for alleged tax default

    FIRS shuts Akume’s hotel for alleged tax default

    The Federal Inland Revenue Service (FIRS) has shut Haf Haven Hotel on 24, Aitku Abubakar Way, Makurdi, the Benue State capital, for unpaid taxes.

    The hotel is owned by Senator George Akume and his wife, Regina.

    Leader of the FIRS enforcement team Chinazor Edeh said the hotel owed N13.5 millioni in taxes. The debt is made up of Company Income Tax, Education Tax, Withholding Tax and Value Added Tax.

    A staff of the hotel, Mrs. Margaret Hinger, phoned Akume’s wife, wanting her to speak with Edeh, who insisted that unless the tax was paid, the hotel would be sealed.

    “I am duty-bound to seal the hotel and am under instruction not to speak with anyone on phone. Please, pay so we can leave your premises,” Edeh said.

    The team ordered the hotel to discharge its guests while workers closed for the day before the premises was sealed off.

    The enforcement team also shut Treaties Bukka at Old Oturkpo Road Makurdi. According to the Warrant of Distrait, the eatery owed N52 million in Withholding Tax and Value Added Tax, from 20013 to 2015.

    The same fate befell Gwalina Suites Nigeria Limited, which owes N4.4 million in Withholding Tax and VAT.

    Earlier in the week, the FIRS sealed off the operational office of Skyjet Aviation Services Limited at the Kaduna International Airport. The aviation firm owes N178.4 million in Company Income Tax and Withholding Tax.

  • FIRS seal off hotels in Makurdi over unpaid tax

    FIRS seal off hotels in Makurdi over unpaid tax

    The enforcement team of Federal Inland Revenue Service, FIRS from Abuja, on Thursday sealed off a five star Hotel located at No24 Aitku Abubakar Way, in Makurdi. Benue state.

    The team, led by Chinazor Edeh said the hotel belonging to a prominent person has refused to remit VAT to government since 2011; a development he said was unpatriotic.

    He gave the management of the hotel 30 minutes to do the payment before executing warrant on them.

    The hotel, according to a Warrant of Distraint used by the FIRS team to seal it off, was owing about N13, 518,493.00 unpaid tax liabilities.

    The amount was made up of unpaid/unremitted liabilities of the hotel in Company Income Tax, Education Tax, Withholding Tax and Value Added Tax between 2011 to 2016.

    Sealing off the hotel was a heavy task for the FIRS team as the management of Hotel led by Mrs. Margaret Hinger insisted that the company is not owing federal government such amount of tax liability.

    Hinger admitted that the Hotel is aware of the tax liability saying there was delayed in the payment of the said VAT because the figures were duplicated by audit firm mandated to audit the Hotel’s accounts, disclosing that they have already paid the sum of N700, 000.00 to the tax office in Makurdi and appeal to the team to unseal the hotel as they are willing to pay the over N13 millions.

    According to Mr. Edeh, ”I Am ordered by my boss, the Chairman of FIRS Mr. Fowler to seal off the hotel and and am under instrument not to speak with anyone on phone. Please pay the money, we can leave your premises”

    The team ordered the Hotel to discharge its guests and the enforcement team locked up the gates while workers of the hotel instantly closed for the day.

    Consequently, when the period of grace granted to the hotel management elapsed, the enforcement team has no choice but to proceed with the sealing and closing down of operations at the hotel.

    It was at the process of sealing off the premises that a guest who identified himself as Mr. Chukwuemka Chikera  disagreed with the FIRS team, saying he is not checking out of the hotel that the action of FIRS was a violation  human right and infringement on his privacy.

    It took the intervention of security personnel who are members of the team to move him out of the premises.

    The team left a part of the entrance to the hotel opened for guests who may not be in when the warrant was executed and may return to pick their properties later.

    The team warned the security officers at premises that no business should be allowed to take place inside the premises until the payment of the tax liability.

    The next point of call for the team was Treaties Bukka located at Old Otukpo road Makurdi, which according to the Warrant shown to the management of eatery joint, was owing N52 million in unremitted Withholding Tax and VAT from 20013 to 2015.

    The team sealed off the kitchens and all other entrances leading to joint.

    But the Chief Executive officer of the eatery who refused to identified himself but said he was a government appointee, disputed the warrant insisting the name that was written on the warrant is disputable because his company name is not limited company but admitted that his company collects VATs on behalf of government without remittance.

    The enforcement team also sealed off Gwalina Suites Nigeria limited  in unremitted Withholding Tax and VAT from 20012to 2016.

  • FIRS shuts firms in Lagos, others over tax debt

    The clamp down on tax  defaulting firms by the Federal Inland Revenue Service (FIRS) continued yesterday as its enforcement teams visited tax defaulting firms in Lagos, Nnewi and Kaduna.

    In Lagos, the FIRS sealed the office of Erin Petroleum Limited at Plot 1649 Olosa Street, Victoria Island. The firm has a tax indebtedness of over $10million. FIRS said the firm’s promise to offset the debt was not kept.

    Also sealed, was Newcross Petroleum Limited, located at Plot 17 LigaliAyorinde Street, Victoria Island, for owing $1.964million. Its Finance Director admitted that the  firm owed the amount, adding that it has paid $100,000 as a sign of commitment and pleaded for more time. The plea was ignored.

    Another firm shut, was Boron Oil Gas Limited, located at Block 110 Henry Ojogho Crescent, Lekki, which owed over N165million. According to Ann Erinne, Head of the Lagos Enforcement Team, the firm was sealed for reneging on its promise to pay N32million monthly to offset the debt. The Financial Controller told FIRS officials that the firm is currently experiencing cash flow problems.

    She added that it paid N27million in July and would pay the N5million balance for July as well as make full payment for August. She pleaded for more time, but her plea was rejected.

  • FIRS seals off more firms for tax default

    FIRS seals off more firms for tax default

    The Federal Inland Revenue Services (FIRS), yesterday, sealed off some companies in Kano, Lagos, and Onitsha for non-payment of tax.

    In Kano, the FIRS enforcement team, led by Mr. Umar Garba, sealed Sani Brothers Transport Company Limited, Triumph Nigeria Limited, Multi System Nigeria Limited and NorthWest Cable Manufacturers Limited.

    The companies are owing N12.3 million, N6 million, N3.3 million and N5.8 million.

    At each offices, Garba read the law empowering FIRS to shut operations of defaulters.

    In Lagos, the enforcement team sealed the office of Secure ID Limited, at 2 Olawale Dawodu Street, Ikoyi, for a debt of N151 million.

    In Onitsha, the warehouse of Next International Company was sealed. The company owes N20.4 million.

    The company has failed to pay Company Income Tax, Withholding Tax and Education Tax since 2006.

    Prior to yesterday’s enforcement, FIRS had shut companies in Lagos, Abuja, Asaba and Onitsha.

    In Abuja, the Office of Urban Shelter Limited, a property development firm, in Shippers Plaza, Wuse Zone 5, was shut for a debt of N637 million, accumulated between 2008 and  2016.

    In Lagos, the Office of Venro Energy Limited, at 250b, Ikorodu Crescent on Dolphin Estate, Ikoyi, was shut for owing N29 million.

    Also sealed was the Office of Enegas, at 14 Oladipo Diya Street, 2nd Avenue Estate in Ikoyi.

    In Asaba, FIRS sealed Davnotch Nigeria Limited. The company owes N34.5 million, comprising Company Income Tax, Education Tax, Withholding Tax and Late Return Tax.

  • NNPC, FIRS, CBN to collaborate on revenue generation

    NNPC, FIRS, CBN to collaborate on revenue generation

    The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Kacalla Baru has  expressed the readiness of the corporation to continue to collaborate with the Federal Inland Revenue (FIRS), Central Bank of Nigeria (CBN)  and other government agencies to generate revenue for Federal Government.

    Baru suggested the setting up of a committee between the NNPC and FIRS to update the Corporation’s tax obligation up to 2015 assuring that all its joint venture partners would align themselves in order to ensure that the right taxes are paid. NNPC Group General Manager, Group Public Affairs Division, GarbaDeen Muhammad made this known in a statement yesterday.

    The FIRS Chairman,  Mr. Tunde Fowler,   praised the NNPC for subjecting itself to tax audit as a good responsible corporate citizen.

    He gave this commendation when he received the GMD and his management team at the FIRS Revenue House in Abuja.

    Fowler thanked the NNPC for the cooperation it has extended to FIRS on tax matters over the years stressing that the two organizations are children of the same father committed to generating revenue for the Federal Government.